[tex-live] Problem with dviout or kpse?

[Wolfgang Fleischer]

Hello

I'm just testing TeXLive 2007 on XP:
My LaTeX project includes *.eps/*.pdf files from
texmf-local/tex/latex/myletter.
Everything works fine with latex/dvips/gsview and pdflatex/acroread.

kpsewhich myfile.eps
shows
c:/texmf-local/tex/latex/myletter/myfile.eps.

When using dviout to display the dvi output of the project the included
graphics myfile.eps will not be found and not shown.

I also tried windvi from TeXLive 2005. Same result.

Both programs show myfile.eps if the file is placed into the project
directory.

Wolfgang Fleischer